Firstly, what does “Big Data” actually mean?
Big Data is, unsurprisingly, a big subject, but in its broadest term it refers to the increasingly huge amount of information that is available to us today. This is primarily driven by the way consumers are embracing the internet as part of their everyday lives. Financial services have been using transactional data to drive marketing for years. Often data from external sources, such as lifestyle data, is overlaid to improve the power of predictive models, and this structured data is increasingly being generated online. However the internet is also generating a wealth of less structured data including content consumption, social media, blogs and even digital photos that can also be harnessed to improve our understanding of consumers. The challenge of capturing, combining and analysing all this information underpins the big data phenomenon. Simply put, we can improve our understanding of consumers by viewing them from the different perspectives offered by different types of data e.g. what products have they bought, what are they doing online, what are they saying in social media, who are they sharing content with etc.
How much “Big Data” is actually out there?
The very first web page was created by CERN in 1989 in order to manage the huge amounts of data being generated by particle physicists. This was the foundation of the worldwide web. Ironically this initiative to provide insight into the smallest particles known to mankind has also provided the catalyst for the largest generation of data in the history of mankind. It’s estimated that there are over 1 trillion web pages in existence worldwide, with new data constantly being uploaded to many of these pages. And the pace of change is even more mind boggling. In 2010 Eric Schmidt, ex- CEO of Google suggested that “Every two days we create as much information as we did from the dawn of civilization up until 2003”.
What are the implications of “Big Data” and “Mobile” combined?
Mobile will help Big Data get much bigger, very quickly, by providing new types of more granular data. Over half the UK population now use a smart phone. With the introduction of 4G, it’s likely that in the next few years mobile will be the dominant form of web access, and therefore the dominant driver of Big Data. The mobile connectivity revolution means that in effect, everyone will carry most of the world’s information in their pocket all day every day. Harnessing all the data uploaded and downloaded by mobile devices has the potential to provide a complete view of what consumers are doing, when and where, 24/7. Additionally mobile gives 24/7 access to these consumers enabling marketing to play a much more valuable and engaging role in their lives.
What should we do with this “Big Data” once we have it?
Many of the emerging Big Data practices are based on how we can use all this data to drive consumer insights. Consumer insights are nuggets of information that allow us a better understanding of their motivations, behaviours and attitudes, which we can use to provide a better service, present more relevant products or just increase the amount we sell to them.
This is a hugely powerful business and marketing tool, leading many business leaders to elevate data to the fourth factor of production – alongside land, labour and capital.
How can we use “Big Data” it effectively in marketing?
1. By extracting insight
Data is of no use to anyone unless meaningful insight can be derived from it. This is a big challenge. Without meaningful insight, capturing and analysing Big Data is just a cost to a business. In this respect we should all be getting excited about Big Insight not Big Data. As a marketing communications agency this is key to what we do, and where our perspective may differ from the IT industry – data is only a means to an end. Extracting and interpreting insight into effective marketing initiatives to drive value is the ultimate objective.
Putting the necessary systems and resource in place to manage Big Data is expensive, and organisations will need skilled analysts who only focus on the insights that matter. Even before Big Data, many Financial Services companies have struggled to maximise the value in the data they already hold, let alone having the means of combining it with less structured data. So, as with all marketing, we would suggest that the approach to Big Data is driven by clear business objectives, with particular focus on improving value for the customer. This will help organisations align their investment in Big Data with the potential returns that it can bring.
2. By improving customer targeting
Deriving meaningful insight should provide an unprecedented level of customer targeting. Inevitably, this level of personalisation can be used to acquire more customers and sell more services. However we see the likely effect of Big Data in this area as being evolutionary as the industry has been using data modelling effectively for some time. However utilising Big Data will be akin to putting existing predictive models on steroids.
But Financial Services companies should proceed with caution. Trust in this sector is at an all time low, and people are wary of sharing their personal information with Financial Services brands so organisations need to avoid appearing too familiar, intrusive, and overly sales focussed.
Undoubtedly there is a big opportunity to drive value in acquisition and retention but we see this as a relatively tactical benefit. The bigger opportunity lies in helping to re-define the relationship the industry has with its consumers.
3. Stimulating customer engagement, value and differentiation
Together Big Data and Mobile provids a revolutionary opportunity for driving competitive advantage.. Offering customers value beyond a simple 2-dimensional transactional relationship, FS brands can build engagement and a true relationship that will help re-establish trust.
In the US, anonymous transactional data provided by banks is now being aggregated and used to make recommendations about restaurants, places to visit, and even products to buy. It is becoming possible to make purchase recommendations based on an individual’s location derived from their mobile GPS signal. Some FS businesses are pulling together all their customers individual financial information into one database. Mobile access allows a complete up to date view of an individual’s financial position whenever and wherever they are.
These are just a few examples of how FS brands can add value for consumers. By getting consumers more engaged with their brands, and with the category as a whole, hopefully more consumers will become financially competent. This could help prevent incidences of mis-selling and build a better understanding of the essential role the industry plays in our lives. Building a greater appreciation, will help close the trust gap, and hopefully re-define the relationship from brand inertia to real brand loyalty.
Big Data can provide the insight, and Mobile the means to deliver, an endless number of applications that consumers really value. All that’s needed is some lateral thinking. And this brings me to my final point. Big Data and Big Insight are no substitute for thinking. The right experience, skill and intuition will still be required to deliver effective marketing solutions. However Big Data can be a facilitator to help re-instate lost trust, save customers time, offer better value and service, and ultimately transform the commercial success of many Financial Service organisations.